US job growth weaker than expected in August but economy continuing to growThursday 04 September 2014 14.45
US companies hired fewer workers than expected in August, but the trend in job growth remained consistent with a sturdy economic performance in the third quarter.
That view was reinforced by other data today showing only a slight increase in the number of Americans filing for unemployment benefits last week and a decline in the trade deficit to its lowest point in six months in July.
The ADP National Employment Report showed private payrolls increased by 204,000 workers last month after rising by 212,000 in July.
While that was below economists' expectations for a gain of 220,000 jobs, it marked the fifth straight month of private sector employment gains above 200,000, and the increases in payrolls were broad-based.
The report is jointly developed with Moody's Analytics.
The data was released ahead of the government's more comprehensive employment report tomorrow.
Nonfarm payrolls are expected to have increased by 225,000 last month after rising by 209,000 in July, according to a Reuters survey.
In a separate report, the US Labor Department said initial claims for state unemployment benefits increased 4,000 to a seasonally adjusted 302,000 for the week ended 30 August.
Despite the rise, claims remained at levels consistent with strengthening labour market conditions.
The jobs market is being closely monitored for clues as to when the Federal Reserve will start tightening monetary policy, having kept its benchmark overnight lending rate near zero since December 2008.
The strength the US economy has exhibited in recent months stands in sharp contrast to the euro zone, which is flirting with recession and deflation.
The European Central Bank today cut interest rates to new record lows in an attempt to spur stronger activity.
The dollar rose to a 14-month high against the euro. Prices for US Treasury debt also rose.
In a third report, the US Commerce Department said the US trade gap fell 0.6% to $40.5bn in July, the lowest since January. June's trade deficit was revised to $40.8bn.
Economists polled by Reuters had expected the deficit to widen to $42.2bn from a previously reported $41.5bn shortfall in June.
When adjusted for inflation, the deficit narrowed to $48.2bn, the lowest since December 2013, from $48.9bn in June. That could see economists raise their estimates for third-quarter gross domestic product. Third-quarter GDP growth estimates range as high as a 3.5% annual pace.
Trade weighed on growth in the April-June period.
Exports increased 0.9% to a record high of $198bn in July, supported by a surge in goods, automobiles, parts and engines, as well as non-petroleum products.
Imports rebounded 0.7% to $238.6bn after declining in June, a sign of underlying strength in domestic demand.
The increase in imports was driven by food and autos, which both hit record highs.
Petroleum imports declined, which saw the petroleum deficit hitting its lowest level since May 2009.
A domestic energy boom has seen the United States reduce its dependence on foreign oil.
The politically sensitive trade gap with China was the highest on record in July.